Soccer Business Bits: Stadium Trouble in San Jose, TV Bonanza & More

san-joseDuring the season we have provided updates on San Jose’s efforts to build a stadium.  When MLS awarded Lew Wolff an expansion franchise it was largely understood that the deal was partly contingent on promises to build that stadium.  Now however, Wolff has announced that the planned opening of the stadium will not go forward as previously planned.  According to Wolff, a naming rights deal is required to fill a $50 million gap in funding.

The city of San Jose had previously agreed to chop $40 million off the purchase price of a 75 acre parcel that will include the Stadium and additional mixed use development. Mr. Wolff will now pay $89 million for the site (purchased by the City for $81 million). The stadium will seat 15,000 (with additional seating for 3,000 more on a berm at the stadium’s open end) and will use 14 acres of the site. However, his need for this additional funding will create a further setback and further delay.

Elsewhere, the plethora of soccer available on American television this summer was underscored on Wednesday night.  Without even considering the games on during the afternoon, Wednesday night saw the Fire/Galaxy on ESPN2, Houston/Metapan on FSC, a Champions League replay on CSN, a Bundesliga replay on GolTV and WPS playoffs on FSC.   Seemingly every night, there are quality games available on televsion.  The explosion of available soccer has been remarkable, and will continue with the availability of EPL games on ESPN.

Finally, it was interesting to see the promotion of the new EPL/ESPN relationship during the Galaxy/Fire game.  The games were certainly mentioned during the broadcast.  Will ESPN promote its MLS games during itsEPL games?  Despite using the British feed, there will be opportunities to promote their MLS coverag.  Will they?

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Guest Commentary: WHAT MLS IS DOING RIGHT (AND WHAT IT CAN DO RIGHT NOW) TO GROW ITS POPULARITY AMONG U.S. SOCCER FANS

mlsAll season, we have focused on the efforts of individual teams to convert soccer fans to MLS fans.  We have interviewed various front office personnel, analyzed marketing efforts targeted to hardcore fans and interviewed soccer fans around the country to determine what they want from MLS.  Today, we offer the guest commentary of Craig Codlin, a 38 year old corporate attorney and lifelong soccer fan living in Seattle.  Now a Sounders season ticket holder, Craig previously lived in New York City and endured multiple losing MetroStars seasons.  He is a fan of all things MLS and today provides us with some great insight into the League’s effort to keep and retain fans.  Thanks to Craig for some outstanding analysis.

Don Garber, the commissioner of MLS, recently articulated an important concept relating to the way MLS is going to be marketing itself in the future.  Essentially, he said that he believes there are plenty of soccer fans in the U.S. and that MLS’s job is to convert these soccer fans into fans of the League. This is important in many ways, not least of which is the apparent complete shedding of the original plan MLS had and stuck with for many years, which was to focus most of its energy to selling its product to the U.S. non-soccer fan.  The theory, I imagine, was that MLS would already have the diehard soccer fans in its pocket just by virtue of showing up in the U.S. and filling the void and that it should spend its resources on converting the non-soccer fans into fans.  As we all know, this was a flawed approach, resulting in such horrors in the early years as the game clock that counted down to zero and the “shootouts” to avoid the seeming travesty of a tie.

Soccer fans in the U.S. are a fiercely loyal and stalwart bunch.  They show up at pubs at 8am to watch games in Europe and they endure the constant barrage of barbs and verbal jabs that come from the general American sports media and fans who sometimes seem to feel that the possibility that soccer could gain a toehold in this country is a personal affront to everything American.  But because of their fundamental love for the sport, nobody else can bring as much passion to the stadiums, and as solid numbers to the TV broadcasts, as this group of people. But getting this group to embrace MLS, when they are generally more inclined to spend their soccer viewing time watching higher quality European, Mexican or national matches (even more so given the abundance of high quality soccer currently available on cable and satellite)is an immense challenge. I do not believe it is insurmountable, but it will take some time, partially because MLS in many ways dug a hole with this group of fans from the outset due to its focus on the soccer-mom families instead of the true U.S. soccer fan.

I believe that there are three actions that MLS is currently taking (or in the process of taking) that will greatly enhance its ability to bridge the gap and pique the interest of the U.S. soccer fan who has not yet embraced the League. seattle

Building and Cultivating Regional Rivalries. One of the major problems MLS confronts from a marketing perspective is that its geographic spread (which, of course, includes Canada) is much larger than almost all (if not all) of the existing domestic leagues world-wide, with major population centers spaced thousands of miles apart, making it much more difficult to cultivate interest outside of the cities that have teams. If you live anywhere in England, you are at worst a short train ride away from an EPL club and if you live in a major population center such as London there are many teams all within a ride on the Tube.  The proximity of all of the teams naturally creates intense rivalries, which in any sport generates interest. MLS simply does not have a situation where all of the teams can be in relative proximity to one another, so it must foster regional rivalries. The addition of Philadelphia, whose sports fans bear chips on their shoulders as the red-headed step-child city of the Mid-Atlantic, and two more Pacific Northwest teams, will clearly help.  The hope is that their entrance into MLS will create pockets of intense regional rivalries on which the League can build interest and a broader fan base. The first time Seattle Sounders FC heads into Portland, you can bet that the game will be nationally televised and promoted, simply to get as many U.S. fans as possible seeing a stadium packed to capacity with passionate fans creating complete and utter bedlam.  I would imagine that any soccer fan in the U.S. would find it worth their time to spend two hours watching that game, the same way that many hard core baseball fans country-wide love seeing the Red Sox and Yankees square off in meaningful October games.  The addition of Montreal would also create a natural rivalry with Toronto, which will also be great for the League. Putting aside the quality of the play on the field for a moment, nothing gets the U.S. sports fan more excited than the perception that a sporting event is something more than just a game, but rather something that is greater than the sum of its parts.  Stands filled to capacity with screaming, chanting, passionate fans helps create that perception.  Which leads me to…

rio tintoStadiums: Even on television (and even more so in person), there is a vast difference between seeing a game played in a fantastic venue like Rio Tinto or HDC versus converted baseball stadiums (with pitchers mounds in full view, tiny dimensions and horrible fan sight lines) and cavernous football stadiums (particularly once the NFL and college football get started and the additional lines on the pitch make die hard soccer fans’ eyes bleed). Thank goodness, assuming there are no unpleasant surprises, MLS is in the process of building great new stadiums in Houston, San Jose, Kansas City, Philadelphia, Portland and New York, all of which should be completed and fully functioning by 2012 (and all of which, other than Portland, will have natural grass surfaces, I believe). Only Seattle (which seems to work, even in a large stadiumfor now), New England (which will not change in the foreseeable future), D.C. (which is actively seeking a new stadium deal) and Vancouver (which sees B.C. Place as a temporary home with a waterfront soccer stadium on its wish list) will be left in gigantic football stadiums, and there will be no more minor league baseball or small college football stadium eyesores left. This alone will make MLS seem much less “minor league” to traditional soccer fans. Getting the soccer specific stadiums filled, of course, is still a challenge (see Colorado and Dallas as prime examples), but I believe that as more and more games are played in proper soccer venues, soccer fans will as a whole take MLS more seriously and begin to show up in greater numbers.  Also, with the vast majority of MLS teams having permanent homes for which they control the scheduling, the League will be seen as more financially stable, eliminating the concern for fans that they will be getting themselves invested emotionally and financially in a team and league that could disappear at any time.  Ideally, MLS will do its best to ensure that future stadium projects are as close to downtown epicenters (or at least easily accessible public transportation from those epicenters) as possible, since those stadiums tend to draw the best crowds. Of course, in the end, it is the product on the field that will do the most to win over the hearts and minds of the U.S. soccer fans, leading me to probably my most important point…

collective bargainThe Collective Bargaining Agreement. While the traditional management stance since the beginning of time has always been to keep wages as low as possible, MLS needs to take a giant, progressive leap forward here and take a position which for management will seem counter intuitive. MLS teams have got to have the ability to pay, and therefore retain, their quality players, particularly the players that they spent the time to develop.  The wages paid to second and third tier players (after the designated players, of course) are disgraceful by any standard, much more so for a professional sports league that considers itself “major league”.  Even the top tiered non-DP players have every incentive to leave the U.S. for even minor European leagues since the pay discrepancy is so vast (Kasey Keller has stated he was offered three times as much as his $300,000 salary with the Sounders to play in the Romanian league).  Keeping as much domestic talent as possible (understanding that, for now, almost all truly world class U.S. players will still bolt for Europe if given the opportunity) should be a huge priority for MLS.  Not only does it keep recognizable American faces here, but it increases stability for the teams within MLS to be able to build their team (and their brand) around a core of high quality American players. Knowing that the same players will (generally) be around from year to year fosters more fan loyalty and, not coincidentally, sales of playerrelated merchandise such as jerseys. Currently, MLS team strategy seems to be to sign one aging big name DP plus a couple of decent players, and then to fill in the gaps with the chaff of dirt cheap, interchangeable parts. The solution to this problem is conveniently available right now, as the League is conducting its collective bargaining agreement negotiations with the MLS players union. The cap needs to be loosened considerably (possibly with a Larry Bird-rule type exception, allowing teams to keep the stars they cultivate) or, at the very least, should be more than tripled to around $6-7M (plus the DP exception) with annual lock-step percentage increases to the cap each year during the life of the new collective bargaining agreement. This action alone will immediately increase the quality of the product on the field and allow MLS franchises room to develop and sign players good enough to create much higher quality play league-wide on the pitch. MLS needs to be forward thinking about this and understand that while the “NASL dilemma” makes this step a bit scary, there is a way to do this smartly that will dramatically increase the league’s credibility among the U.S. soccer fan.

With the “Summer of Soccer” being an unquestioned success at both the turnstiles and in the amount of attention heaped upon it by the mainstream media, the time is right for MLS to make its sales pitch to the U.S. soccer fan.  By continuing to take the steps MLS seems to be consciously taking to foster rivalries, as well as building stadiums that represent well the sport we love, MLS has begun making much better choices to appeal to this crucial base of fans.  But in the end, the quality on the pitch will be the ultimate determining factor as to whether these fans will buy-in to the MLS experience.  The collective bargaining agreement is the tool with which the League can finally make a huge statement to these fans that it understands that quality of play is the single most important thing a soccer league can offer.  It is time to shed some (but not all) of MLS’s fiscal conservatism and give MLS teams the flexibility to go out and build quality clubs that have the capability to play aesthetically pleasing, competitive soccer.

Soccer Business Bits: MLS in HD, ESPN Double Feature and a Terrible MLS Promotion

soccertvWe’ll start with some news and notes from the world of televised soccer.  In a recent interview with EPL Talk, FSC Programming Director Dermot McQuarrie  announced that 2010 MLS games will be televised in HD.  When combined with ESPN HD programming of MLS, this now gives MLS fans at least two nationally televised MLS matches inEnglsih in high definition each week.

Elsewhere, MLS fans get a rare treat this week with games on ESPN on back to back night. On Wednesday, the high profile Galaxy/Fire matter will be on ESPN2 at 9:00 p.m.  Unfortunately for ESPN and MLS, Beckham will not be playing after seeing red over the weekend.  Casual fans will have to be satisfied with Donovan and Blanco.

The following night, ESPN2 will show the Revs/Sounders match at 10:00.  Sounders games always show well on television and the Revs match should be no different.  Both games should have lively crowds and great atmospheres and will good advertisements for the League.

Elsewhere, MLSnet.com is promoting an arrangement with Makita USA.  The “experience of a lifetime” includes tickets to an away match, hotel, and V.I.P. experience and travel.  Amazingly (and laughably), the trip doesn’t include travel.  There is also a prize of tools for the runner-up. The only requirement is registering on the site.

Last week, we chided the Red Bulls for offering an away trip that included flight and tickets, but no hotel or ground transportation.  Now, MLS is sponsoring an away trip with no travel arrangements.  I’m sure the League has its reasons for these “half” deals, but they come off remarkably low rent.  Perhaps worse than offering these types of deals is the active promotion on the League website.

Bringing the Fans to MLS: Part IV-The Soccer Hater

jim rome“Soccer is a girl’s game”  “There are no goals, it is boring” “It will never succeed”  “Why do they roll around on the ground all the time”

All soccer fans have heard these statements.  We all know people who feel this way about the “beautiful game”.  This is part four of our MLS attendance series.  You can see part I here,  part II here and part III here. We have collected anecdotes from hundreds of friends, coworkers, fans, familes, store owners and acquaintainces in an effort to determine what will bring more fans to MLS. We have asked these questions at soccer matches of all levels, dinner parties, social gatherings and board meetings.  We have been asking these questions since February with an eye towards seeking out trends about MLS fandom and what brings people to Major League Soccer League stadiums.

Should MLS attempt to bring “soccer haters” to the game?  Are they worth converting?  During our interviews, the sentiments set forth at the top of this page were repeated over and over.  Most of the people who fit in this category would rather watch anything other than soccer.  They are annoyed that ESPN even bothers to carry the games and cannot believe that the game gets “so much attention.”  Most think it is a kids’ game or sport for girls.  They decry the lack of content, lack of scoring and lack of commercials.

Yet, among the people we spoke with, there were a couple of passionate MLS supporters that say they started as soccer haters.   All remember getting dragged to a soccer event and having a surpisingly good time.  All of these converts are more dedicated to their local MLS side than many season ticket holders.

However, these folks are the significant minority.  Most of these soccer haters detest the game and have no inclination to give it a chance.  Overwhelmingly, these folks describe the NFL as their favorite sport.  They typically like sports radio and turn it off if there is a soccer conversation.  They told me they believe just about every negative soccer stereotype, and many related that they disliked the guys that played soccer in high school or college.  They don’t want to be “won over” or sold the game.

So the question is, should MLS try?  Is it worth devoting marketing dollars and efforts to convince these potential fans to come to MLS?

Soccer Business Bits: Money in Salt Lake, Fredy in Seattle and More

rslWe promised part IV of our series on MLS fans, but with so many business stories around American soccer today, we thought we would postpone part IV and touch on some of those stories.  We will return to our fan series next week.

In Salt Lake City, the Tribune is reporting  that the MLS all star weekend generated more than $3 million in tourist dollars for the local economy.  Including non-tourist dollars (i.e. locals spending money), it is estimated that more than $9 million was spent in the community because of the MLS event.  These are the types of figures that are important for MLS as it looks to build stadiums and add franchises.  The ability to pour this type of money into a local economy, through the occupancy of hotels, purchase of merchandise and other commercial transactions is an important consideration for communities evaluating the possibility of spending money on MLS.

Elsewhere, the Seattle Times is reporting that Columbian forward Fredy Montero is now the property of MLS.  The former Deportivo Cali striker had been on loan to Seattle, but he is now owned by MLS.  Montero is just 21 and is in the picture for the Colombian National Team.  MLS will now stand to benefit from both his play and the possibility of a future sale.  Click here for more on this story.

One final note, American star Landon Donovan reportedly tested positive for Swine Flu.  While not a “business bit” per se, it is definitely a reminder about the amount of travel inherent in the sport of soccer.  Especially in MLS where players are repeatedly subject to commercial flights, the perils of travel are omnipresent.

Soccer Business Bits: Defer to the Nats

tv soccerWe know that the soccer world’s attention is focused on the aftermath of USA/Mexico, so we will defer from any business posts today.  We will return tomorrow with Part IV of our soccer fans series.  Until then, take a look at this nice attendance break down courtesy of MLS Daily. Also take a look at the excellent USA/Mexico breakdown by MatchFit USA.

One other note.  Since we covered the Mun2 broadcast issue fairly heavily (see our interview with Mun2 executive Kevin Dugan), here are our quick thoughts on the broadcast.  The frequent break-ins to promote the network were fairly annoying (but not unexpected).  I was surprised that all of the commercials were in Spanish because the network is intended to attract English speakers.  The commentary was fine and overall picture and sound were of reasonable quality.  I was very impressed with the ESPN pre-game live from Azteca.  Amazing that ESPN went to Mexico while Mun2 did not.

Soccer Business Bits: Deals??, Stadiums and More

red-bulls1On the eve of the US/Mexico showdown, we thought we would keep our sites on the upcoming MLS weekend and some of the marketing efforts teams are employing to bring fans to the gate.  In New York, the Red Bulls are offering a contest for round trip airfare and game tickets for the upcoming Red Bulls/Chivas USA match at the Home Depot Center.  Offered through MLS partner American Airlines, the trip seems designed to bring fans to the website.  Remarkably (and embarassingly), the trip does not include ground transportation, food and hotel accomodations.  This “deal” is pretty disappointing. Why would the Red Bulls send two fans off to Los Angeles and leave them to fend for themselves?  This is cheap for the sake of cheap and very disappointing.

In more positive Red Bull news, the first section of stadium roof has gone up.  Click here for the webcam of the stadium construction.  The progress in New York is far ahead of construction in Philadelphia.  Given that the buildings are intended to open at the same time next year, this is some cause for concern.  There has already been talk that the Union will start the season with a long road trip.  With vagaries of winter weather, construction delays and more, it will be a real struggle to open in Chester in time for 2010 first kick.

Finally, a bit of MLS/USMNT combination news.  In Salt Lake City, Real has announced plans for the sale of tickets for the World Cup Qualifier at Rio Tinto. The team offered a pre-sale for RSL season ticket holders and now seats are available to the public.  There are also offers for VIP packages and more.